Discussion of Family Law Appeals in Harris, Montgomery, Fort Bend, Brazoria Counties & Across Texas

Opinions, April 28, 2016: The Church Giveth & the Court Divideth

On April 28, 2016, both the First and the Fourteenth Court of Appeals released opinions which, after rehearing, substitute for earlier opinions.

In West v. West, No. 01-14-00350-CV, Thurman West appealed the final decree in his divorce from Gwendolyn West, challenging the trial court’s finding that he was intentionally underemployed and setting his child support obligations at higher than statutory guidelines, mischaracterizing and distributing property, and awarding Gwendolyn her attorney’s fees.

Thurman and Gwendolyn married in 1997 and had three children. Thurman was/is the pastor and president of Southeast Community Church. Gwendolyn worked as the church’s bookkeeper from 2006 to 2009.

In his first and second issues, Thurman challenged the trial court’s findings that he was intentionally underemployed, a finding which the Court of Appeals did not even reach based on its review of Thurman’s income. In its decree, the trial court set monthly child support for Thurman at $1,906. Thurman’s salary from the church was $32,000 to $35,000 but that was his base income. Based on this salary alone, his monthly net resources were $2,485. But Thurman received remuneration from the church in other forms besides his salary. The church paid for the children’s health insurance; he received a weekly expense allowance of $200; the church had for a period of ten years given Thurman a $50,000 annual housing allowance; and every year Thurman received monetary gifts which increased his annual income as much as $20,000 to $25,000. The evidence, the Court of Appeals found, supported a finding that Thurman’s net monthly resources were $9,185. As this amount was above the statutory cap, his monthly child support obligation under guidelines would have been $2,250. By setting child support at $1,906, the trial court actually set it below guidelines. As such, the Court of Appeals affirmed the child support without reaching the issue of whether Thurman was intentionally underemployed.

Thurman’s third and forth issues challenged the property division. In 2003, Thurman and Gwendolyn purchased a residence in their names though the church made the down payment. From 2003 to 2010, Gwendolyn and Thurman lived in the house with their children. Thurman testified that “all understood from the beginning” that Thurman and Gwendolyn would deed the house to the church. Gwendolyn disagreed and testified that she never intended to deed the house to the church; that she and Thurman purchased the property in their names and made payments from Thurman’s income.

In 2005, Thurman and Gwendolyn had in fact executed a deed transferring the house to the church. In 2007, however, when interest rates improved and the church wanted to refinance the loan, the church deeded the property back to the Wests. After the Wests refinanced, Thurman attempted to deed his interest back to the church but Gwendolyn did not. The warranty deed signed by Thurman was in evidence. It purports to transfer both Thurman and Gwendolyn’s interest in the house to the church, but it is undisputed Gwendolyn did not sign the deed.

In its decree, the trial court awarded each party about $75,000 to $80,000 in assets. It awarded the house to Thurman which had a market value in 2013 of $278,140 and in which the community estate had equity of $60,433.

On appeal, Thurman’s third issue argued the trial court erred in characterizing the house as community property and awarding it to him in the division because there was no evidence he owned an interest in the house. Thurman’s fourth issue argued the trial court erred in characterizing funds in two of his bank accounts as community property when they were church related gifts and, thus, his separate property.

The Court of Appeals held that because Gwendolyn did not sign the deed, it was void; Thurman conveyed no interest to the church in 2007; the church remained community property; and the trial court did not err in awarding the house to Thurman.

As to the bank accounts, Thurman argued that the funds in two of the accounts were “gifts” from the church, constituted his separate property, and thus the trial court erred in awarding a portion of the funds to Gwendolyn. Gwendolyn testified that the “gifts” from the church were, in fact, income. The Court of Appeals found that these “gifts” were received by Thurman annually on his birthday and anniversary and that the church took up collections to pay these gifts (not to mention the “love gift” he received every fifth week in the amount of $1,150). As the funds were presumed to be community property, the Court of Appeals held Thurman failed to rebut the presumption with clear and convincing evidence that the funds were gifts instead of community property income.

In his fifth issue, Thurman was successful on his challenge to the award of attorney’s fees, however. The Court of Appeals found that Gwendolyn’s counsel failed to present evidence regarding the prevailing hourly rates, the reasonableness of the rates, or the number of hours spent on the case. The Court of Appeals ordered Gwendolyn take nothing on her claim for fees, but affirmed the decree in all other respects.

In Adeleye v. Driscal, No. 14-14-00822-CV, in his motion for rehearing, the appellant Adeleye presented evidence that he filed for bankruptcy on January 1, 2013 and was not discharged until July 10, 2015. During that two-and-a-half year period, appellee Driscal filed a petition for divorce on November 1, 2013 and the trial court signed a final decree on October 9, 2014. The bankruptcy instituted an automatic stay but the trial court in the divorce proceeding did not handle that issue. As such, the Court of Appeals abated the appeal and remanded the case to the trial court to explore the automatic stay issue.